ASIATODAY.ID, JAKARTA – The trend of the world’s main suppliers of pulp and paper products is currently starting to experience a significant shift towards Asia, especially Indonesia and countries in East Asia.
This is certainly a strategic opportunity for Indonesia to become a leader in the world pulp and paper industry.
“Several decades ago, North America and Scandinavia (NORSCAN) countries were the world’s main suppliers of pulp and paper products, however, now there is a significant shift towards Asia, especially Indonesia and countries in East Asia. “This is a big opportunity for us, an opportunity for Indonesia to become king of the pulp industry,” said the Director General of Agro Industry at the Ministry of Industry, Putu Juli Ardika, in Jakarta, Saturday, January 18 2025.
As one of the national priority industries, the Indonesian pulp and paper industry makes a significant contribution to the national economy. In 2023, total exports from this sector will reach US$8.37 billion and contribute up to 4.03% of the Gross Domestic Product of the non-oil and gas processing industry. Apart from that, this industry is also a source of life for more than 275 thousand direct workers and 1.2 million indirect workers.
Apart from that, the Indonesian pulp and paper industry also has a comparative advantage, namely the availability of wood raw materials which grows relatively faster than Industrial Plantation Forests.
Putu said that per capita paper consumption in Indonesia has only reached 32 kg per year, which means the pulp and paper market still has great potential to develop. Apart from that, the increasingly popular green lifestyle trend encourages the use of paper as an environmentally friendly packaging material to replace plastic. This also opens up opportunities for Indonesia to reach new markets, both domestically and globally.
Along with the development of the pulp and paper industry, he also said that there had been a significant increase in production capacity.
“From 103 business units in 2021, there will now be 113 business units in 2024. Installed pulp capacity increased from 10 million tons per year to 12.3 million tons per year, while paper production capacity increased from 18.2 million tons to 20 .86 million tonnes per year in the same period,” said Putu.
However, even though Indonesia is now ranked 7th in the world in the pulp industry and 6th in the world in the paper industry, there are still several big challenges that must be faced, such as the availability of recycled paper raw materials, guaranteed supply of raw materials from imports, namely European policies. Union Waste Shipment Regulation (EUWSR) which will limit imports of recycled paper from the European Union.
Apart from that, another challenge is the implementation of several international conventions that are vulnerable to disrupting the domestic paper product market, including the Regional Comprehensive Economic Partnership (RCEP) partnership and the Carbon Border Adjustment Mechanism (CBAM) policy for paper products marketed in the European Union.
Regarding the problem of recycled paper, Putu said that domestic availability is in fact not sufficient for the paper industry’s needs, and recycled paper raw materials still require quality improvement in terms of reducing impurities. Therefore, the Ministry of Industry has formulated steps in the form of strengthening governance of raw materials, especially recycled paper, whether domestic or imported, and increasing the competitiveness of local products through downstreaming and technology transfer.
Other steps include implementing a circular economy and sustainability, including increasing the domestic recovery rate, as well as expanding export markets in the form of strengthening cooperation agreements on access to international industrial products. This policy aims to maintain industrial operations and aims to support the creation of competitiveness in the national pulp and paper industry.
“We also support efforts to increase access to recycled paper raw materials that are recovered domestically through developing standard specifications for the recycled paper sector as industrial raw materials, benchmarking independent impurity management technology according to the industrial profile of recycled paper users, and preparing a Needs Plan “The industry for recycled paper is on the commodity balance,” explained Putu. (AT Network)
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